July 2018
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
www.thesparkng.com<br />
The Spark | Ignite/Connect/Achieve<br />
• Withholding Tax deduction from fees paid to its suppliers and<br />
service providers.<br />
Mistakes Tech Start-ups Make With Tax<br />
Mistakes I see tech entrepreneurs and start-ups make is to focus<br />
mainly on making sales and relegating taxes to the background of<br />
their businesses. Tax should be an integral part of their business<br />
models. The tax laws are clear on the tax compliance requirement<br />
for companies. Taxation therefore should not be left until the tax<br />
authorities come knocking for tax audits / reviews. Companies<br />
should be good corporate citizens and should ensure that their<br />
accounting and tax records are up to date and proper taxes are<br />
remitted to government.<br />
Influence of Technology on the Tax Profession<br />
Yes technology has influenced the tax profession. Tax is closely linked<br />
to accounting records. These accounting records are used by<br />
government agencies to check the correctness and accuracy of taxes<br />
paid. Various accounting software packages have been developed<br />
and improved on over time to keep records which has made<br />
tax reviews easy. Examples of these packages are SAP, Navision,<br />
Peachtree, Sage, QuickBooks etc.<br />
“<br />
“<br />
The Law was and still is the bedrock of<br />
any form of tax collection.<br />
The Federal Inland Revenue Service (FIRS) have also used technology<br />
to aid tax compliance. For instance, tax payers can now sit from<br />
the comfort of their offices to file their monthly tax returns which<br />
previously had to be completed manually and submitted at the tax<br />
office.<br />
Challenges and Prospects<br />
Challenges include the need to sensitize all companies, including<br />
start-ups, on the need to pay their tax. The FIRS, Lagos and<br />
Ogun states have ongoing sensitization programs to encourage<br />
compliance. Other state governments are encouraged to emulate<br />
this trend.<br />
There needs to be an open communication and partnership between<br />
government and tax payers. Tax payers most likely will willingly<br />
comply where they trust that the monies paid to government will<br />
be put to good use. Government must in turn ensure the use of<br />
resources to provide and maintain infrastructure and basic amenities<br />
which will impact businesses directly and indirectly.<br />
Also, government must make the economy conducive for businesses<br />
to thrive and encourage local and foreign investments. Some actions<br />
to improve the business environment is continuous changes made to<br />
archaic laws, grant of incentives and tax waivers where necessary and<br />
elimination of multiple taxation.<br />
Final Advice for Tech Start-Ups<br />
I do not expect tech start-ups to have a full grasp of what the tax<br />
compliance needs of their companies are as their areas of strength<br />
@thesparkng<br />
5